Mario Draghi, the president of the European Central Bank, has said coping with the refugee crisis will be a boost for growth and brushed aside fears that the turmoil in global markets heralds the start of a recession.

Draghi said it was important that Europe worked together to turn the challenge of coping with refugees into an opportunity and said one knock-on impact would be higher public spending.

Speaking in Davos, the ECB president said 2016 had begun with “market gyrations” and “heightened sensitivity to risk” but said it was too early to say that the economic fundamentals had changed for the worse.

He added that the eurozone was continuing to recover at a modest pace due to the ECB stimulus, lower oil prices and an easing of austerity programmes. A fourth driver of growth, which had yet to have an effect, would be “the increase in government expenditure that will be necessary to cope with the refugees”.

Davos 2016: Refugee crisis will change Europe, says Draghi - live

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In Davos, he again sought to reassure nervous investors. “We have plenty of instruments, especially the determination and the willingness of the [ECB] governing council to act and deploy these instruments.”

The annual World Economic Forum gathering has been marked by warnings from European politicians that the arrival of more than 1 million refugees last year, and the expectation of a similar number in 2016, is putting immense strain on the EU.

Draghi said: “Our society will be changed by this. In which direction, we can only guess. It is also premature to know how long it will take to transform this challenge into an opportunity.”

The ECB president said Europe needed to show determination, confidence and a willingness to cooperate, “because the size of the challenge could actually undermine the confidence and make fear prevail over any other consideration. And the challenge is lost.”